The UK’s Coalition government and heterodox economics

Michael Ellman

Cambridge Journal of Economics, 2015, vol. 39, issue 5, 1457-1464

Abstract: The UK Coalition government’s economic policy was primarily aimed at reducing the large fiscal deficit that it inherited, mainly by cutting expenditure. This was considered irrational by heterodox economists on the grounds that it would harm employment and output. Politicians influenced by this tradition advocated a plan B. Experience has shown that the Coalition government’s policy was not irrational. Employment reached record heights and economic growth resumed. The paper draws attention to the implications of these facts for heterodox economics and economic policy. It is concluded that, just as mainstream economics had to rethink after the economic crisis of 2008–09, so heterodox economics has to rethink after the recovery of 2014–15.

Date: 2015
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